Author: b12ny

The market has always seen it as the leading meme coin. By the end of 2024, due to the Trump and Musk effect during the US presidential election, the price soared, but then entered a significant correction, with the decline exceeding 60% at one point, which is consistent with the overall decline in the meme coin sector, indicating that its short-term momentum is dominated by market sentiment.

In terms of institutional layout, Grayscale launched the Dogecoin Trust Fund (with a management fee of 2.5%) in January 2025, which is only open to accredited investors. Although the scale is still small (around $2 million AUM), the significance goes beyond the numbers, as it represents that $Doge has officially entered the range of investable assets for institutions, and is seen as a key step in the transition of Dogecoin from a meme-driven to an institutionally invested asset.

As for ETFs, it is being pushed by Bitwise, which has submitted an application for a $Doge ETF to the SEC. If approved, it may further expand the market liquidity of $Doge. However, there are currently no approved cases, and the future development still needs to be observed in the changing regulatory environment.

$Doge has the potential for short-term speculative value and long-term application scenarios, and its price is highly correlated with Musk in the long run. X is actively exploring the integration of payment systems, and if $Doge is incorporated into the X payment system, this will be the biggest market catalyst since 2021.

The future development direction will depend on three key variables: payment applications, institutional investment, and coin distribution dynamics.

Currently, $Doge is still a speculative asset driven by the community. If X or Tesla expands their payment applications, it may bring new market demand. In addition, the progress of ETF applications and regulatory policies will also affect the inflow of institutional capital, further changing the market structure of DOGE. This article will analyze the current positioning and potential opportunities of $Doge through historical review, narrative economics, and in-depth analysis of coin distribution.

Historical Review

$Doge was born in 2013, initially created by Billy Markus and Jackson Palmer to satirize the bubble in the cryptocurrency market, but unexpectedly developed into the global meme coin with the highest market capitalization. The historical development of $Doge can be divided into several major stages:

2013 - 2017: Community-driven and Charitable Culture

• The Reddit community drove $Doge to become an internet tipping currency.
• In 2014, it sponsored the Jamaican bobsled team to participate in the Winter Olympics.
• In 2015, Elon Musk first publicly expressed interest in $Doge.

2018 - 2020: Low Liquidity and Marginalization

• $Doge maintained a low price for a long time without any significant narrative driving the market.
• The main liquidity came from community trading, without institutional attention.

2021 - 2022: Elon Musk and the Meme Coin Frenzy

• The GME event and Musk's posts drove $Doge, which surged 100-fold in 4 months.
• $Doge's market capitalization once exceeded $90 billion, making it one of the top three cryptocurrencies.
• Major exchanges like Robinhood, Coinbase, Binance, and OKX listed $Doge.

2023 - 2025: Institutional Capital Inflow and Payment Integration

• Elon Musk's acquisition of Twitter (now X) boosted the sentiment for $Doge.
• Tesla started accepting $Doge as payment for some products.
• Trump's election as US president, with a more crypto-friendly attitude, may drive related policies.
• The circulation of X Money code and related information raised market expectations that it may support crypto payments for $Doge.
• Grayscale launched the $Doge trust fund, and Bitwise submitted a $Doge ETF application.

Narrative Economics

The market value of $Doge mainly depends on narrative drivers, which determine the future development and liquidity sources of $Doge, and also affect the capital rotation patterns of institutions and retail investors. The current market narratives are as follows:

• Meme coin leadership and POW mechanism
• Musk effect and the connection with $Doge
• Payment narrative (Tesla, X Money)
• Institutional investment and ETF applications

Meme Coin Leadership and POW Mechanism

• Meme Coin Leadership

Since the birth of $Doge, it was mainly driven by the Reddit community to become an internet tipping function. Since the last bull market, it has established itself as the leading meme coin due to Musk's relationship, although it is still primarily influenced by the overall market trend. It also has long-term correlations with other meme coins and has catalyzed the birth of other meme coins.

For example, $Shib and $Floki were born in 2021, as well as the then-popular $Babydoge. It is worth mentioning that compared to other "meme tokens" compatible/existing on public chains, $Doge is the largest market cap "meme coin" (POW) (second only to $BTC), with $LTC being the third.

• POW Mechanism

In the last bull run, you might have heard the phrase "Bitcoin gold, Litecoin silver, Dogecoin bronze", as they all have a POW architecture and similar code. The main difference between $Doge and the other two is the inflationary mechanism, with $Doge having a fixed annual issuance of 50 billion coins, while the others have a maximum supply cap. The table below compares the information and mechanisms of the three:

In 2014, when $Ltc's hashrate was as high as 600GH/s, $Doge's was less than 40GH/s, making the network attack cost on DOGE very low, leading to pool attacks and Dogecoin Wallet hacking, causing the price to plummet 95.26%. To enhance security, LTC founder Charles Lee suggested that the $Doge community join forces with $Ltc for merged mining (AuxPoW), which sparked heated debate, but the community ultimately chose to bind with $Ltc.

Through shared computing power, $Doge's network hashrate has grown steadily, increasing the cost of hacking attacks on DOGE and ensuring the chain's security. The rewards earned by miners have also become their main source of income (early $Ltc miners were also large $Doge holders), and in retrospect, the merged mining at the time did bring a win-win situation.

Musk Effect and the Correlation with $Doge

Everyone knows that the big driver behind the 2021 resurgence was Musk. Over time, the market influence of $Doge has become increasingly linked to Musk, including his announcement on April 28, 2021, that he would appear on Saturday Night Live (SNL), and the live broadcast on May 8.

During the broadcast, when asked what $Doge is, he jokingly replied, "It's a hustle", causing the price to crash 30% from $0.74. At the time, Grayscale's Barry Silbert even posted that he had shorted $Doge for $1 million on FTX. The irony is that $Doge has now become one of the coins in Grayscale's trust fund, showing a clear change in attitude.

Musk also strongly supported Trump's presidency in this election, and last year even proposed a government efficiency department (abbreviated as D.O.G.E.) to improve government efficiency and reduce costs. The market initially linked this initiative to $Doge price movements, and the official website briefly changed to the $Doge logo in early January.

However, reviewing the past to the present, the overall environment has changed, and the market no longer buys into Musk's simple meme slogans or tweets. The expectation for an increase is now placed on Musk's ability to actually support $Doge through other means.

Payment Narrative (Tesla, X Money)

In 2025, X announced the upcoming launch of the payment service X Money, a key step in Musk's plan to turn X into an "All-in-one" app. Based on the current information, it will include digital wallets, instant transfers, QR code payments, and integration with Visa, and more in-depth system integration is expected to be released soon.

As a Crypto trader, I'm more focused on whether the expected integration of X Money and $Doge can be realized, in addition to the existing Tesla payment method that includes $Doge (limited to certain products). Some media reports have also mentioned that some of Tesla's supercharging stations in the US support charging payment.

Based on the information I currently have, my interpretation is as follows:

• Tesla

According to @inevitable360's query of the front-end code, it was found that the code for "DOGECOIN" can be found on the cybertruck page. In the period of 2022 - 2023, I also personally found the codes for "DOGEPAY" and "DOGECOIN" by querying the front-end code. Subsequently, Musk issued an announcement officially opening the payment function. Therefore, combining this information with the payment narrative, it is very likely that the option to pay and purchase vehicles with Dogecoin will be realized this year.

• X Money

The information released by @aaronp613 shows that X plans to launch X money first in the United States. Since X Money has not yet obtained a complete license for all 50 states in the US, it may choose to go online first in the 39 states that have been approved, through the testing and verification of some states. Additionally, a QR code will be provided for each user, similar to a payment QR code, to facilitate mutual transfers and remittances.

Based on my past research experience and interpretation, it was in April 2023 that Musk fulfilled his 2022 promise and changed the Bluebird logo to the Doge logo. Including the earlier mention of D.O.G.E briefly replacing the official website logo with a Doge, I believe Musk will honor his original promise or joke (the Twitter acquisition was also a joke).

At the practical level, if X Money officially supports financial services, X can test the feasibility of the payment service, and then optimize and expand based on market response. Regulation will become a topic of speculation, and whether X Money can overcome regulatory obstacles may also become a market focus, attracting capital speculation on Doge, and Doge can also realize one of the universal methods of cross-border payment.

The most well-known is in 2022, when the CEO of Robinhood, the largest Doge holder address, Vladimir Tenev, stated that if Dogecoin wants to become a future daily payment and trading asset, it can solve the problem of low transaction throughput by increasing block size and reducing block time. The co-founder of Dogecoin and Musk also expressed support for his views.

Tenev first mentioned that Dogecoin's transaction fees are already low enough to be a viable electronic cash leader, but he believes that if it is to be more widely adopted, the block size and block time of Dogecoin are the main points that need to be improved. Therefore, if the speed issue can be further reduced (I believe Musk wants to do it without any problem), combined with the fact that Tesla has already realized Doge payment, the scenario of collaborating with the X Money payment application may greatly expand globally.

Institutional Investment and ETF Applications

• Institutional Investment

In addition to Grayscale launching a Dogecoin trust fund (nearly $2 million AUM) this year, which is seen as a key step in the transition of Doge from a meme to institutional investment, the Dogecoin Foundation is also a core player in promoting and supporting the development of Dogecoin.

The Foundation also announced the establishment of a "Core Development Fund" in early 2023, investing 5 million Doge (about $360,000) to support the work of Dogecoin core developers. In November 2024, the Foundation issued a fundraising appeal, seeking the support of major sponsors to drive the large-scale adoption of Dogecoin in 2025, with the funds to be used to build a decentralized payment infrastructure called "Dogebox" to assist small and medium-sized enterprises in accepting Dogecoin as a payment method.

Additionally, the members of the Foundation are also worth noting. In 2021, the Foundation was reorganized, and the members of the Advisory Board include: Dogecoin co-founder Billy Markus, core developer Max Keller, Ethereum founder V-God, and Musk's long-term business partner Jared Birchall, all of whom are well-known influential figures.

• ETF Applications

In early February, Bloomberg analysts James Seyffart and Eric Balchunas predicted the approval probabilities of ETFs for $Sol, $Doge, $Ltc, and $Xrp:

$Doge (75%): As the largest meme coin, the 19b-4 filings of Grayscale and Bitwise have been recognized by the SEC, so the approval probability is relatively high.

For the institutional part, Trump's policies and statements tend to reduce regulation and encourage market development, which also increases the probability of approval for the $Doge ETF. Therefore, the real question is not whether it will be approved, but when it will be approved.

Personally, I believe it must be approved by the end of this year, so that the positive effect of the ETF narrative does not diminish due to diminishing marginal returns. Currently, the number of coin ETFs applying for and submitting applications is increasing, so it is necessary to seize the opportunity to get approval before the end of the year, so that the market's price expectations will be higher (from the perspective of liquidity priority and quantity).

If the $Doge, as the leading meme coin, is approved as scheduled, its status and probability as a legitimate payment method may increase significantly. That is to say, whether Trump's Crypto policy truly drives the development, it will also have a key impact on Musk's development of $Doge payment and the financial market.

Chip Structure

Due to the concentration of $Doge chips in a few addresses, the top 115 holders account for 65.4% of the total circulating supply, and even a single institution like Robinhood holds 21.06% of the chips. Therefore, a deep understanding and analysis of the impact of these chips on price fluctuations is usually helpful in identifying clues before the market starts and ends. The following table is a comparison of my past research on the Top 20 and Robinhood holdings:

According to the analysis in the article "Beyond Musk: The Real Price Drivers of Dogecoin?! Chip Distribution, Price Impact at a Glance! Quickly Grasp the Key Signals Before the Price Surge", by observing the on-chain transfer behavior of the top 20 Doge holders, especially the smart money addresses, it can be found that the timing of the operations of these large Doge address holders is highly correlated with the price fluctuations. The following table lists the addresses with higher correlation with the price:

The transfer behavior of these addresses can be used as a reference signal for trading strategies such as buying at the bottom and selling at the top, as well as the selling pressure caused by large-scale transfers, which often become a reference for the short-term market trend. For traders, paying attention to the dynamics of these addresses can provide analysis and evaluation of future price trends, although their market behavior shows that the participation of large smart money makes their chip dynamics more complex.

Current Positioning and Potential Opportunities of $Doge

Based on the past price and cycle, it is very likely that a relative bottom will be formed between $0.18 and $0.2, and then break through the historical high again. I have also stated in my previous tweets that I am willing to make a large purchase at $0.18. If I had to give a price forecast, I think the probability of this cycle reaching $1 is the highest, just as $10,000 for $Btc has historical significance.

At the current stage, $Doge still depends on market narratives and liquidity. In the short to medium term, it may still maintain high volatility following the overall market. Assuming that key events such as the approval of X Money and ETFs are realized as expected, $Doge may truly transform from a meme coin to a "payment-type cryptocurrency".

This content is the result of my five-year in-depth understanding and analysis of Dogecoin since I entered the field. If you like my content or want to further discuss, feel free to leave a message or like and share.

See you on the moon.